This article originally appeared in ValueCap Research’s China Capitalist newsletter.

The post-80s and 90s generations are more adventuresome travelers than their parents, but aren’t ready to ditch the tours quite yet.

A recent GfK study found that in 2015, 109 million Chinese tourists traveled abroad and spent $229 billion in retail while on their trips. Chinese tourists are now considered one of the most significant groups of international travelers, both for their huge numbers and large spend. Half of all Chinese tourists are 15 to 29 year-olds – a group often called “millennials” in the West.

The post-80s and post-90s generations, noted for their birth decades, generate much interest as they are better educated than previous generations, and they are likely to have relatively good starting salaries – 66% of millennials make over ¥5,000 a month, which in China can be considered middle-class. Their salaries will increase over time, as seven out of ten hold white collar jobs. While they do face high monthly expenses, they are more willing than previous generations to spend on themselves. According to Boston Consulting Group, millennial consumption is growing at 14% annually, twice the rate of those over 35 years old.

Like other Chinese tourists who enjoy shopping during their trips, millennials also like to shop, but buying physical items is less important to them than having unique experiences. According to the Chinese International Travel Monitor, millennials rank shopping third behind sightseeing and dining as their most preferred travel activity.

Instead of spending all their money on shopping, young people want to have rare experiences that they can show off to their friends. As the most digitally connected generation to date, they want to take pictures of interesting sights and post them on their WeChat accounts, and they want something to remember when they are back home working long hours. Mr. Li, a 26 year-old student who recently went to Singapore and Malaysia with his girlfriend, says of his generation, “They want to relax and tell other people they are having a very good time . . . they have additional money and time to make life more beautiful.” As a result, they are willing to spend more for special experiences.

Lodging can contribute to these experiences – the founder of Zanadu, a luxury accommodation website that provides “unique travel experiences” says that many of his customers only make around ¥15,000 a month, but are willing to pay for high-end resort stays. Mr. Li and his girlfriend decided to spend a night in a novelty hotel where the rooms are made from converted shipping containers. Hotels that are able to add such experiential components are likely to do well.

Young people also highly value local activities, ones that are unique to a destination – hot springs in Japan, Korean-pop music concerts in South Korea, and diving in Malaysia are some examples. Visiting famous historical sites is also attractive, as is local dining. Many are cynical, however, about adventure experiences like bungee jumping or skydiving, which are not unique and can be done anywhere.

Young people say that their choice of destination depends largely on time and financial resources – the more they have of both, the further away they go. Those who can afford it would rather go to more expensive, developed countries. Young people with fewer resources still choose to travel, but stay within China, or go to other Asian countries. Jiang Jinghan, a Beijing university student, says that it takes much longer to apply for a visa if you want to go to developed countries. “For me, the purpose of travel is to go someplace you don’t know, or see something you haven’t seen before, so it’s not necessary to just go to Western countries. Other countries can also satisfy me.” The top outbound destinations for Chinese tourists are South Korea, Thailand, Hong Kong, Japan, and Taiwan.

Chinese millennials are often characterized as adventuresome and independent. According to, 58% of millennials prefer to travel independently. Yet talk to young people and it is not clear that many actually travel that way. They dislike tour groups due to a lack of freedom, forced shopping trips, and the inability to get close to local people. At the same time, many are daunted by the idea of going it alone in a foreign country. One of the big reasons cited is language. “My favorite way to travel is to go with a group of friends,” said Yang Xinyuan, a 23 year-old Beijing professional, “that way everyone can do what they want, go where they want, and can stay longer. But for some trips I still choose to travel with a tour group. When there’s a different language and you have no way to communicate with local people, I go with a group.”

Another issue is parental worry. Those under 30 are still seen as young by older generations, and 20-somethings are often not willing to ignore their parents’ concerns. The aforementioned Mr. Li and his girlfriend traveled alone, but he had to persuade his parents. “My parents strongly recommended that we join a tour group. They said you will enjoy a cheaper price, you will be 100% safe… the only thing you have to sacrifice is a little freedom. I finally convinced my parents we can travel alone.”

Time investment is also a concern. Many busy young people do not have the time to plan their own trips and are willing to exchange freedom for convenience. Feng Ruixue, a 30 year-old Beijing professional, made her first trip abroad to South Korea earlier this year. She had not planned to go to Korea, but heard about the trip via WeChat – she sent a message to a travel agent, provided some visa documents, and let him do the rest. It was much easier than planning alone. “I just gave him money, like two weeks before,” she said.

There seems to be a gap between what young people dream of and what they feel equipped to handle. Companies that help to bridge that gap are likely to do well. Websites like and their main competitor, (Hornet’s Nest), help empower youths by providing travel guides, recommendations, and reviews. Other sites such as Qunar, Tongcheng Travel, Ctrip, and Tuniu Travel also support independent travelers by allowing them to book flights and hotels.

With the convenience of these travel apps, young people have more tour options available to them. As a result, they are choosing tours that allow greater flexibility, such as “free days” away from the tour, independent evenings, or different activity options. Also popular are tours given by local guides who speak Chinese or can provide off the beaten path experiences.

Despite fears about traveling abroad, it is clear that younger generations are more willing to give up tour guides. Some are already comfortable with it. Zhan Penghui a 24 year-old living in Beijing, has traveled all over China and Nepal. She does not like to plan her trips, travels alone, and stays in tents and youth hostels. She says many of her friends want to travel like her, but they lack the courage. “Everyday life is boring. It’s all the same. When you travel you don’t know where to go, you don’t know who you will meet or what will happen. I actually think that’s the most fantastic thing about travel.” The young people of the next decade are likely to be more adventuresome.